Car Insurance in South Africa: How It Works (2026 Guide)

Last updated: 16 October 2026

Car insurance pays to repair or replace your car after an accident, theft or other damage. It can also pay for damage you cause to someone else’s car. This guide explains the types of cover, how excess works, how claims work and what drives your premium.

What Is Car Insurance?

Car insurance is a short-term (non-life) insurance policy. You pay a monthly premium. In return, the insurer covers certain losses to your car, or to other people’s property.

Many South African drivers have no insurance. If one of them crashes into you, you may have to pay for your own repairs. Your own policy protects you from that.

Car insurance vs the Road Accident Fund

People often mix these up. The RAF is a state fund paid for through a levy on fuel. It compensates people who are injured or killed in road accidents. It does not pay for damage to any vehicle.

So if your car is damaged, the RAF will not help. Only car insurance, or your own savings, will.

Types of Car Insurance

There are three main levels of cover. The more cover you have, the higher the premium.

Comprehensive cover

This is the widest cover. It pays for damage to your car even if the accident was your fault. It also covers theft, hijacking and many weather events. If your car is on finance, the bank will usually require comprehensive cover.

Third party, fire and theft

This covers damage you cause to other people’s cars or property. It also pays if your own car is stolen or burnt. It does not pay for accident damage to your own car.

Third party only

This is the most basic cover. It only pays for damage you cause to someone else’s car or property. Your own car is not covered at all.

Optional extras

Insurers sell add-ons for an extra cost. Common ones include:

• Car hire while your car is being repaired
• Windscreen and glass cover
• Roadside and towing assistance
• Tyre and rim cover
• Credit shortfall cover, for when you owe more than the car’s value
• Excess reducer or excess waiver

How Excess Works

The excess is the amount you pay towards each claim. The insurer pays the rest.

For example, say repairs cost R30,000 and your excess is R5,000. You pay R5,000 and the insurer pays R25,000. These figures are only an example.

Policies can have more than one excess. Common extra excesses apply when:

• A young or newly licensed driver was driving
• The driver was not the regular driver on the policy
• The claim is in the first months of the policy
• The car is written off or stolen

Check your policy schedule for every excess. A higher excess lowers your premium, but you pay more when you claim.

What Value Will the Insurer Pay?

Your policy will say how your car is valued for a claim. Common options are:

• Retail value: roughly what a dealer would sell the car for.
• Market value: roughly what you could get selling privately. It is usually lower than retail.
• Trade value: roughly what a dealer would pay you for the car.

Cars lose value over time. Check each year that the insured value is realistic. Insuring for more than the car is worth will not get you a bigger payout.

What Affects Your Premium?

Insurers price each policy on risk. These are the main factors:

• The car: make, model, age and value. Some models are stolen more often.
• The driver: age, years licensed and claims history.
• Where you live and park: a locked garage is safer than the street.
• How you use the car: private use or business use.
• Distance driven: more kilometres means more risk.
• Security: tracking devices, immobilisers and alarms.
• Excess choice: higher excess, lower premium.
• Insurance gaps: a break in cover can raise your price.

Want to pay less? See our guide on 10 legal ways to lower your car insurance premium.

How to Get Car Insurance Step by Step

1. Decide on the cover type based on your car’s value and finance.
2. Gather your details: ID, licence, car details, address and claims history.
3. Get at least three quotes with the same cover and excess.
4. Check the provider on the FSCA register at fsca.co.za.
5. Answer all questions honestly, including who drives the car most.
6. Read the policy schedule before your first debit order.
7. Complete any inspection or tracker fitment the insurer requires.
8. Keep your documents and the claims number saved on your phone.

How Car Insurance Claims Work

Every insurer has its own process. Most follow these steps.

1. Make sure everyone is safe. Call emergency services if anyone is hurt.
2. Collect details. Get the other driver’s name, ID, phone, licence and registration number.
3. Take photos of the scene, damage and number plates.
4. Report the accident to the police as soon as you can, and get an accident or case number.
5. Tell your insurer quickly. Check your policy for its reporting deadline.
6. Submit your claim form with photos, police details and quotes if asked.
7. Assessment. An assessor checks the damage and approves repairs.
8. Pay your excess, usually to the repairer.

Common Reasons Claims Are Rejected

The Financial Intermediaries Association of Southern Africa (FIA) has listed common reasons motor claims fail. They include:

• Driving under the influence or reckless driving
• Unpaid premiums for that month
• An unlicensed driver, or a driver who was not declared
• An unroadworthy car, such as bald tyres
• Using the car for business when it is insured for private use
• Not meeting the parking or security conditions
• Leaving keys in or on the car
• Wrong or missing information on the application

Common Mistakes to Avoid

• Naming a parent as the regular driver to get a lower price. This is called fronting and can void your claim.
• Not updating your address or parking details after a move.
• Ignoring the excess until you need to claim.
• Letting the debit order bounce. No premium can mean no cover.
• Over-insuring an old car. You pay more but get the same payout.

Scam Warning

Be careful of anyone who:

• Offers cover that seems far cheaper than every other quote.
• Asks you to pay into a personal account or by e-wallet.
• Cannot give a valid FSP number.
• Asks for your banking PIN or one-time PIN.
• Calls about a “claim payout” you never made and asks for a fee.

Always check the provider on the FSCA register before you pay.

Your Rights and Where to Complain

The Financial Sector Conduct Authority (FSCA) regulates how insurers treat customers. Policyholder Protection Rules give you some key rights:

• Cooling-off: for policies longer than 31 days, you can cancel within 14 days of getting the policy, if no claim was made and no insured event happened.
• Grace period: a policy must allow at least 15 days after the due date to pay a premium. For monthly policies this applies from the second month.

If your claim is rejected, complain to the insurer first. If you still disagree, contact the National Financial Ombud Scheme South Africa (NFO). Its Non-Life Insurance division handles car insurance disputes. The service is free.

• Website: nfosa.co.za
• Phone: 0860 800 900

Frequently Asked Questions

Is car insurance compulsory in South Africa?

No, not by law. Compulsory third-party cover was scrapped in the 1990s. But if your car is financed, the lender will usually insist on comprehensive cover.

Does the RAF pay for damage to my car?

No. The RAF only compensates for injury or death in road accidents. Vehicle damage needs car insurance.

What is the excess on car insurance?

It is the part of each claim you pay yourself. The insurer pays the amount above your excess.

Will my premium go up after a claim?

It often does. Claims history is a key pricing factor. Ask your insurer how a claim will affect your premium.

Can someone else drive my car?

Usually yes, if they hold a valid licence. But check your policy. A different excess may apply, and undeclared regular drivers can cause a rejected claim.

Related Guides

• Cheap Car Insurance: 10 Legal Ways to Lower Your Premium
• Life Cover in South Africa
• How to Check Your Credit Score for Free
• Personal Loans in South Africa
• Debt Review in South Africa

Conclusion

Car insurance protects you from big, sudden costs. Choose the cover level that fits your car’s value. Understand every excess and be honest on your application. Check your provider with the FSCA. If a claim is unfairly turned down, the NFO can help at no cost.

Disclaimer: This article is general information only and is not financial advice. Wiz Admissions does not sell or endorse any insurance product. Speak to an FSCA-authorised adviser about your own needs.